APPLY COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL

The purpose of this work is to introduce the CGE Model and apply it to measure the impacts of production activities to the economy. The expansion of hog production and processing on the economy of Texas County, Oklahoma, was used as the case study of this model. The impacts are evaluated based on the measures of welfare. Model in the short-run show that when output of Meat Packing increases 10 times the output of Hog Product increases 11.54 times while the changes of output of other sectors are small, and all commodity prices increase. The measures of regional welfare such as Gross Regional Product increases 7.21%, indirect business increases 8.33% and employment increases 10.74%. Results of the long-run show that output of Hog Product increases 35.04 times when output of Meatpacking increases 30 times. Output put of Other Livestock decreases 47% because price of main intermediate inputs such as Feed Grains and Other Crops increase. The incremental gain of household income is small but prices of necessary commodities decrease cause households welfare gains from 0.34 to 0.55 percent.